In re Tesla Inc. Securities Litigation

Background

Plaintiff Glen Littleton moved for a temporary restraining order (TRO) against Defendant Elon Musk. Littleton asked the court to temporarily prevent Musk from discussing the case and its underlying facts, including the character or credibility of parties and witnesses, pretrial materials, evidence, the strengths or weaknesses of either side’s case, and other information that could be inadmissible and create a substantial risk of prejudice.

Littleton based the motion on comments Musk made during an April 14, 2022 TED Talk. The opinion states that Musk said funding had been secured to take Tesla private in July or August 2018. The court had previously found in its summary judgment order that Musk’s August 2018 tweets making similar claims were false and made with the required intent.

Court’s Analysis

The court treated the requested TRO as a prior restraint, meaning an order that prevents speech before it occurs. Prior restraints are strongly disfavored and are presumed invalid. Under Ninth Circuit standards, a court may issue a speech restriction against trial participants only when the restrained activity creates a clear and present danger or a serious and imminent threat to an important protected interest, the order is narrowly written, and less restrictive alternatives are unavailable.

The court found that Littleton had not adequately shown any of these required elements. First, the trial had been rescheduled for January 2023, and publicity months before trial was less concerning than publicity during or immediately before trial. The court also noted that the jury would come from a large, diverse metropolitan community and that Musk’s recent comments were consistent with public positions he had already taken during the litigation.

Second, the court found the proposed order apparently overbroad. It would restrict Musk himself, not only his counsel, and would prevent him from speaking to anyone, not merely to the media. The court explained that the justification for restricting attorneys is stronger because attorneys are officers of the court with professional and ethical obligations, but that lower standard does not apply to non-attorney participants such as Musk.

Third, the court found that less restrictive measures were available. Questioning prospective jurors could address bias from pretrial publicity. The court also concluded that jury instructions were unlikely to be ineffective in this case because jurors would be told that the court had already found the August 2018 tweets false and made with the required intent. The opinion cited the presumption that juries follow judicial instructions.

Disposition

The court denied Glen Littleton’s motion for a temporary restraining order. It stated that the order disposed of Docket No. 395.